THE SITUATION IN SOUTH VIETNAM

• Document Type: SPECIALCOLLECTION
• Collection: Tet Declassified
• Document Number (FOIA) /ESDN (CREST): 06786689
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 17
• Document Creation Date: April 27, 2019
• Document Release Date: April 30, 2019
• Publication Date: February 26, 1968

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DIRECTORATE OF
INTELLIGENCE
Intelligence Report
he Situation in South I ietnam
�(Weekly )
--Seent_
,13
26 February 1968
No. 0509/68
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
THE SITUATION IN SOUTH VIETNAM
(19 February - 25 February 1968)
C ONTENTS
Section
POLITICAL SITUATION
Ky quits task force; Anti-Communist
front; Government detentions; Lower
House bloc appeals for government
reform.
REVOLUTIONARY DEVELOPMENT II
Refugees and civilian casualties;
Status of the National Police;
Communist reorganization of the
Saigon area; Communist plans for
action in the cities.
ECONOMIC SITUATION III
Saigon economic situation; Provincial
economic situation; Long An Province;
Kien Hoa Province, Long Khanh Province.
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I. POLITICAL SITUATION
Vice President Ky and General Nguyen
Duc Thang resigned on 20 February as chair-
man and chief of staff, respectively, of
the national recovery task force. A large
number of prominent individuals of widely
divergent political views met on 18 Febru-
ary to begin work on establishing an anti-
Communist front. Although some encouraging
signs have emerged from the meeting, hopes
for the cohesiveness of the new front are
rather dim. The government has taken into
protective custody several prominent opposi-
tionists whom it considers possible tar-
gets for Viet Cong abduction or assassi-
nation and two labor leaders whose detention
is causing a particular stir. A new Lower
House bloc has presented President Thieu
with a reas9ned appeal for certain govern-
mental reforms as a reciprocal move for
the people's anti-Communist fight and their
sacrifices during the Tet offensive.
Ky Quits Task Force
1. Vice President Ky and General Nguyen Duc
Thang resigned on 20 February as chairman and chief
of staff, respectively, of the national recovery
task force. Their duties have been assumed by Prime
Minister Loc and Secretary to the Prime Minister
Doan Ba Cang.
2. Ky announced his decision to the task force
by asserting that the group's basic objectives, as
outlined in its limited, temporary charter, had been
accomplished and that his continuance as chairman
would only give rise to further rumors that he is
attempting a power grab. While these appear to be
genuine reasons for Ky's resignation, there were
also apparently other factors motivating his deci-
sion.
indicate that he hoped Thieu would give him a longer
mandate by utging him to stay on as chairman or that,
failing this, he could point up the government's
less than dynamic response to the emergency by with-
drawing his own leadership.
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3. Thang had earlier attempted to resign in
frustration over the task force's bureaucratic pro-
cedures and the constant bickering of some members.
His resignation on the 20th was followed by the an-
nouncement of his long-pending appointment as IV
Corps Commander, to succeed General Nguyen Van Manh.
The appointment is to take effect on 1 March. Prime
Minister Loc is not expected to put in a particularly
effective performance as the new chairman of the task
force, which in any case will probably only function
for another two or three weeks. Doan Ba Cang, how-
ever, is regarded by Americans participating in the
group as a man of action and could compensate some-
what for the absence of Ky and Thang.
Anti-Communist Front
. 4. The effort to establish a broadly based
antigovernment_ front moved forward on 18 February,
when'a large number of prominent individuals with
widely divergent views held what was dubbed the
"People's Congress to Save the Nation." Among those
present were veteran politicians Tran Van Huong,
Phan Khac Suu, Ha Thuc Ky, Tran Van Tuyen, and Nguyen
Xuan Oanh; labor leader Tran Quoc Buu; former generals
Tran Van Don, Ton That Dinh, Pham Van Dong, Mai Huu
Xuan, and Le Van Nghiem; moderate Buddhist Thich
Tam Giac; a number of National Assembly members; and
some Hoa Hao and Cao Dai luminaries.
5. The congress elected a 25-member standing
committee to begin the work of forming an anti-Com-
munist front, which all present agreed should sup-
port the government and receive help from it, but
which definitely will not be a government tool. A
12-man advisory board was also selected to assist
the standing committee.
6. Notably absent from the meeting, despite
the wide representation present, were any members
of President Thieu's entourage. They are apparently
attempting, with less success, to organize their
own anti-Communist front. The impetus for holding
the congress was apparently provided by an assistant
of Vice President Ky. The impression is widespread
that this is a Ky group, but it is quite obvious
that the congress and the front which is expected
to emerge from it are not composed solely of Ky
supporters.
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7. Although some encouragement can probably
be taken from the fact that individuals of such
diverse and, in many cases, strong antigovernment
views could show even a fleeting unity of purpose,
prospects for the front's cohesiVeness� are some-
thing less than bright. There is already criticism
of it, even from some of the congress participants.
Some are lending their names to the front, but not
their active support, and others who participated
in the congress have already withdrawn. Many others
both participants and non-participants, see the
front as merely a means of advancement for the po-
litically ambitious. Vice President
does not give tne
because he believes
front much chance for success
will exploit it for their own interests.
Government Detentions
many
8. Whatever gains might have been made by the
congress may be negated by the government's deten-
tion during the week of a number of prominent persons
The police took into protective custody militant
Buddhists Thich Tri Quang, Thich Ho Giac, and Thich
Lieu Minh; former presidential candidates Truong
Dinh Dzu and Vu Hong Khanh; oppositionist Au Truong
Thanh; former defense minister under Diem, Ho Thong
Minh; and labor leaders Tran Huu Quyen, secretary
general of the Vietnamese Confederation of Labor
(CVT), and Vo Van Tai, secretary of the CVT's Saigon
Council. The government claimed that these individ-
uals are possible targets for kidnaping by the Viet
Cong, who would use them to establish a coalition
government, or that the Communists might assassinate
them and blame the government.
9. The government undoubtedly has a point.
Many of these individuals might be susceptible to
Communist propaganda on a coalition government or,
as oppositionists, they might be targets for assas-
sination by the Viet Cong, who could then attempt
to smear the government. The scope of the arrests,
however, and the fact that these people are opposi-
tionists have given rise to cries that the government
is simply out to get its political enemies. The
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detention of the two labor leaders has caused more
of a stir than have any of the others, because
these appear least justified.
10. Tran Quoc Buu, CVT President, has reportedly
received indirect assurances from Vice President
Ky that Quyen and Tai will be released, but no date
has been given. He plans to bring the matter up
with President Thieu in a meeting on 26 February,
pointing out to Thieu that the CVT hs been a con-
sistent supporter of the government, despite occa-
sional differences. Buu will also remind the presi-
dent that immediately after the Tet offensive he,
Quyen, and Tai issuedr:sta'tements condemning the Viet
Cong and supporting the government, while non-CVT
labor leaders have remained mute on the subject.
It was CVT officials, however, whom the government
chose to arrest.
11. The detention of militant Buddhist leader
Thich Tri Quang is causing less of a commotion, but
some sources feel that this action too will hurt
the government.
rtnat Tri Quang's prestige
with the Buddhist faithful had been diminishing
rapidly in recent weeks and that would
probably have continued if he had not been taken
into custody. Now, however, his image among his
followers will probably grow. Lower House deputy
Ly Quy Chung has expressed similar views, claiming
that Tri Quang's refusal to denounce the Viet Cong
attacks had seriously hurt his prestige, but that
the government now has made a martyr of him.
Lower House Bloc Appeals for Government Reform
12. A new Lower House group, the New Society
Bloc, composed primarily of opposition deputies,
has presented President Thieu with a reasoned appeal
for a clean-up in government so the people's anti-
Communist struggle and their sacrifices"will not
have been in vain." The statement begins with a
denunciation of the Communists' Tet attacks and goes
on to request a reorganization of the administrative
apparatus to eliminate corruption and inefficiency.
It further urges an immediate re-evaluation of
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government policies and programs, particularly in
the areas of national security, revolutionary develop-
ment, and information.
13. The statement also points to the need for
both true unity within the executive branch and greater
allied assistance in order to put down false rumors
that "the war has been prolonged for some hidden
reason or other." Deputy Ly Quy Chung, one of the
New Society Bloc's leaders, told an embassy officr
that President Thieu, when presented with the state-
ment, had appeared to accept the justice of the
criticisms.
14. The reasonable tone of the statement and
the manner of its presentation should strengthen
its impact. �The credentials of these opposition
deputies as responsible critics are strengthened
by the fact that they joined quite readily in the
Lower House's earlier statement of support for the
government during the crisis. They apparently still
hold this view but recognize the immediate necessity
�for certain reforms.
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II. REVOLUTIONARY DEVELOPMENT
Approximately 481,000 additional
refugees have been caused by the inten-
sified fighting which has recently taken
place throughout South Vietnam. Estimates
of civilian casualties vary widely but
losses have been heavy.
The Communists!
Region 4--traditionally the city of Saigon
and its environs--was extensively reorgan-
ized and enlarged in the latter months of
1967. Recently captured documents confirm
that the Communists have a long-term plan
to build up their strength in the cities.
Refugees and Civilian Casualties
1. From 30 January to 22 February, an estimated
481,000 refugees were caused by the intensified fight-
ing which has recently taken place throughout South
Vietnam. The breakdown by corps shows 78,000 refugees
in I Corps, 86,000 in II Corps, 117,000 in III Corps--
with 60,000 in Gia Dinh Province alone; 138,000
refugees in IV Corps.
2. Estimates of civilian casualties vary from
4,200 to 5,300 killedand-at least 17,100 wounded.
These estimates apparently include only the civilian
losses in the provincial capitals and autonomous
cities. If the status throughout the country can
be sorted out, civilian dead will probably exceed
this estimate. In the heat of battle, it is possible
that some civilian casualties were included among
the nearly 40,000 Viet Cong that have reportedly
been killed since 30 January. Estimates of the
number of civilian houses destroyed vary from
40,000 to 62,000.
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Status of the National Police
3. Although accounts on the performance of
the National Police since the Communists' Tet
offensive began on 30 January are still fragmentary,
initial assessments indicate that, with some
exceptions, the police forces in the fbrovincial
capitals turned in a creditable job.
Police installations and senior officers
appear to have been and remain a principal target
of the enemy. For example, on 1 February, 13 police
precinct and sub-precinct posts were attacked in
the Saigon - Gia Dinh area alone.
4. A 17 February assessment of provincial
police operations indicates that
since 30 January the police lost 245 killed and
287 wounded. In many of the reporting provinces,
the police are operating from damaged or temporary
quarters.
5. It is not certain whether the losses suffered
by the police in the six autonomous cities--two of
which also serve as provincial capitals--are included
in the initial loss figures. Over 100 police officers
have reportedly been killed in the Saigon-Cholon
area alone.
6. In several provincial capitals it appears
that the police and Provincial Reconnaissance Units
have taken advantage of intelligence gained through
interrogations, documents, and agent reports to
round-up members of the Communist infrastructure.
In addition, a number of relatively high-ranking
Viet Cong were captured during the fighting in the
various urban areas. Some members of the Communists'
city infrastructure--among them some key cadre--
have reportedly been arrested in Da Nang, Nha Trang,
Qui Nhon, Pleiku, Cam Ranh, and Rach Gia.
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7. The Communists, however, overran the prov-
incial prisons in at least four cities--Hue, Quang
Ngai, Phan Thiet, and Go Cong--and succeeded in
releasing an estimated 3,200 detainees, the majority
of whom were Viet Cong. These gains should help
them to offset their loss of cadre.
Communist Reorganization of the Saigon Area
8. As early as December 1967 captured documents
suggested that the Communists' Region 4 had been .
extensively reorganized and its territorial respon-
sibilities extended. Region 4 traditionally had
been the urban ancLsuburban sectors of Saigon,' Cholon
and Gia Dinh and perhaps, more recently, the special
"Rung Sat Zone." Since the Tet offensive, prisoners
captured in the Saigon area have claimed that the
capital area no longer has the status of a region.
Although details of the reorganization are vague,
it is possible that Region 4 has been made part
of the much larger Region 1, which houses the
Communists' major military/political headquarters
in South Vietnam--COSVN.
9. Neither the prisoners nor the documents
give any clear cut reason for this reorganization,
but its timing coincides with preparations for the
Tet offensive which represented the first Viet
Cong attempt to mount any significant military
action in the Saigon area. A major reorganization
of this nature could suggest that the Communists
intend to sustain this kind of pressure on the
capital city for some time.
10. In the past, Region 4 had been a special
anomaly among Communist regions. It is small in
territory and served primarily political objectives.
In the year prior to the Tet offensive, Communist
efforts in Saigon had been confined to political/
subversive operations which were only occasionally
supplemented by spectacular terrorist-type attacks.
Moreover, the political and military resources of
Region 4 were seriously disrupted by allied opera-
tions during the past two years, probably reducing
Region 4's capability to sustain a major military
effort against Saigon.
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11. Prolonged military engagements in the
city, however, would require that forces be brought
in from outside the region, and would also require
more extensive communications and support from
surrounding military commands. In addition, there
are indications that COSVN, or even Hanoi,may have
assumed greater control over the current offensive
in the Saigon area and central III Corps and may
be charting strategy in this area.
Communist Plans for Action in the Cities
12. Recently available texts of captured docu-
ments confirm that the Communists have a long-term
plan to build up their strength in the cities. It
thus seems likely that the Viet Cong will follow
the recent Tet offensive with continuing political
and military pressure against the urban areas.
13. Documents discussing a step-up in activ-
ities in the cities have appeared frequently over
the past years. Late last summer, however, they
began to increase gradually in number, apparently
as the Communists began preparations for their
offensive against urban centers. Long aware of
their neglect of this area, they acknowledged that:
"in many cities and towns, (party) committee cadre
have not given proper attention to...carrying out
the revolutionary's policy." But.. ."cities, in
particular, are the enemy's last sanctuaries and
should be destroyed at any cost... We must desig-
nate weak areas and cities and strongly develop
our guerrilla warfare to strike regularly in those
places."
14. Detailed instructions for Viet Cong agents
being sent into the cities were captured near
Saigon last June. Methods for infiltrating and
exploiting labor unions and other organizations
were spelled out. An indoctrination lesson captured
in I Corps in December called for "more emphasis
on cities and towns to develop political struggle
movements and armed actions therein." A Viet Cong
directive of 20 November called for city units in
Pleiku Province to use secret guerrilla cells to
"prepare the battlefield" inside the city and create
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favorable conditions there to "bring troops inside
for operations," presumably with the Tet offensive
in mind.
15. Assuming that some urban centers would
be liberated, a directive of 16 November, probably
issued from Military Region 5 Headquarters, instructs
Viet Cong units on how to behave. The civilian
population and private property were to be protected.
Looting and drinking were prohibited. South Vietnam-
ese military personnel and civilian officials, pre-
sumably excepting "traitors and tyrants," were to be
propagandized, but not ill-treated.
16. The Communists in their Tet offensive fail-
ed to enlist widespread popular support, but their
directives suggest a longer term effort to get at
the population in cities and towns.
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III. ECONOMIC SITUATION
Retail prices in Saigon fell to only
17 percent above the pre-Tet level by
19 February as the big central market re-
opened. Business activity not related to
food, however, has been recovering much
more slowly, and the Saigon business com-
munity reportedly foresees a relatively
long period of uncertainty. Information
on economic conditions in the countryside
still is scarce,
Saigon Economic Situation
1. Retail prices in Saigon have dropped
sharply since 12 February, when the regular USAID
index of food and nonfood items was 61 percent
above the pre-Tet level. The general price index
on 19 February was only 17 percent higher than on
22 January, as shown in the following tabulation:
22 January
.12 February
19 February
100
161
117 (estimated)
Minister of Economy Ton reported that, between 16
and 18 February, rice prices fell 20 percent as
more commercial dealers resumed sales. The sharp
drop in the over-all price level probably reflects
the reopening of the large central market, which
had been closed since the offensive began.
2. As of 16 February it was clear that other
economic activities in Saigon were not recovering
as quickly as those concerned with food. The
embassy reported that only half to two thirds of
the shops in downtown Saigon were open and these
were doing little business. Curfew restrictions,
although gradually being lifted, are believed to be
one of the major restrictions to the resumption of
normal business activity. Businessmen apparently
are skeptical, expecting, that conditions will
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remain uncertain for at least another two months.
Import licensing resumed on 12 February, but USAID
received few license applications during the week
for the Commercial Import Program. Banks apparently
are very reluctant to finance new inventories be-
cause of the security situation and the uncertainty
about financing for damages to importers' inven-
tories. Most important, perhaps, is that the
general lag in business activity has caused wide-
spread failure on the part of present creditors to
repay loans on time.
3. Insurance companies now estimate that
damage claims arising from the attacks in the Saigon
area will amount to 3-4 billion piasters, of which
1.2 billion piasters is accounted for by damage to
one textile factory. �Business firms will be liable
unless they can show that losses were the direct
result of war, and litigation on this point is ex-
pected to be lengthy. The government is now dis-
cussing the possibility of making loans to repair
war damage and/or establishing a war insurance fund
for future contingencies.
Provincial Economic Situation
4. Information on economic conditions in most
provinces still is scarce.
Long An Province
5. Tan An, the capital of Long An Province
just south of Saigon, was attacked by the Viet Cong
early on 10 February. Although the people re-
portedly feared a second attack, the city market
was open and crowded again by the morning of
11 February. At that time the city had ample food,
but no milk or gasoline was available in normal
commercial channels. Meat prices reportedly were
up 30 percent, but vegetable prices were lower than
usual ecause growers were unable to get their
produce to Saigon via Route 4. Tan An's population
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was swollen not only by relatives visiting during
the Tet holiday but also by an estimated 2,500
people who had fled to Tan An from My Tho in the
south and from Saigon. By 11 February, provincial
officials reported that about two thirds of the
civil servants were back on the job. This showing
was partly the result of efforts by the province
chief, who arranged for military trucks to trans-
port persons stranded in Saigon to their jobs in
Tan An and vice versa.
Kien Hoa Province
6. Unlike Tan An, Ben Tre, the capital of
Kien Hoa Province, was attacked early in the of-
fensive and suffered considerable damage. An
aerial survey showed that about 30 percent of the
city was destroyed.
the damage is more evident in Ben Tre than in
other delta towns, with the possible exception of
Vinh Long, because the Viet Cong burned the central
market and because a large area of solidly built
two-story buildings in the center of town was
destroyed or severely damaged. On the outskirts
of town, poorer dwellings in the path of the Viet
Cong attack also were destroyed. Such surrounding
areas were the most heavily damaged throughout the
delta. As of 20 February, there were an estimated
18,000 refugees receiving assistance in Ben Tre,
but officials expect that about half
be able to return home.
province officials have cone little to assist the
refugees--most of the effort has been led by
CORDS, religious organizations, and volunteer
groups. Rising prices and food shortages were a
temporary problem in Ben Tre. Officials report
that as of 20 February food was plentiful and
prices were declining. As in Tan An, food grown
in Ben Tre and normally sold in Saigon was being
sold locally until the roads are secure. For Ben
Tre the important commercial road is Route 6A to
My Tho, which reportedly had several Viet Cong
checkpoints along it.
of them will
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Long Khanh Province
7. Xuan Loc, the capital of Long Khanh
Province located northeast of Saigon in III Corps,
was attacked on 31 January, but apparently suf-
fered little damage. Officials report that
throughout the province about 200 houses were
destroyed, of which 60 in Xuan Loc were burned by
illumination flares. There was continuous air
transport to the town and military convoys came
every day, but by 12 February bus service, pre-
sumably on Route 1, had been available on only two
days. By 12 February, American pacification ad-
visers had been driving regularly to and from
Bien Hoa for several days. Route 1 from Xuan Loc
to Phan Thiet on the coast reportedly had never
been closed. Provincial officials acted immediately
to set up a rice rationing system, and people have
been allowed to buy one day's supply at a time for
each family member. The sales are handled by rice
merchants, but only one is allowed to sell rice
each day. As of 12 February, the province had
about ten days' supply of rice on hand and gasoline
reportedly was on the way to replenish the ex-
hausted supply.
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